This blog serves readers of ElectroIQ.com, the home for Solid State Technology (semiconductors), Photovoltaics World (photovoltaics), Advanced Packaging (packaging) and Small Times (nanotech/MEMS).

Monday, October 24, 2011

US solar vs. China: Win to lose?

Taking full advantage of last week's Solar Power International spotlight, seven US-based c-Si solar panel manufacturers dubbed the "Coalition for American Solar Manufacturing" (CASM) said they are filing petitions with the US Department of Commerce and the International Trade Commission, alleging that Chinese rivals are "dumping" products into the market and are receiving "massive illegal subsidies" from their government. Any formal Commerce/ITC investigations could begin in November, with preliminary determinations coming by year's end or early 2012.

Reaction to the trade dispute has been immediate and reflects the complexity involved in such a dispute. On the one hand are US solar manufacturers who feel squarely in the crosshairs and want "significant duties" imposed (up to 100%) to level the playing field. (Also in their corner are local politicians, including Ed Markey/D-Mass who decried a "Manchurian manipulation.") In between are the materials and manufacturing equipment suppliers who have customers (and locations) on both sides. China, naturally, isn't taking the accusations lying down: Yingli, Suntech, and China's Ministry of Commerce [edit 10/27: plus Suntech, Trina and Jinko] have all spoken out publicly against the accusations and potential ramifications. (Firing back, the CASM calls Chinese accusations of US solar protectionism "absurd" coming from what it calls the planet's worst trade law violator: "China has for years been engaging in economic protectionism and a quiet economic war affecting all of its trading partners," the group states. And SolarWorld's president Kevin Kilkelly pointed to the recent Jinko Solar chemical pollution controversy as an example of allowed lack of transparency.)

What seems clear is that most of the industry is treading very carefully on the subject. Besides SolarWorld, the other six coalition members are keeping anonymous (as they are legally entitled to do in the US), likely fearful of ramifications in the high-growth China market. Equipment suppliers are understandably noncommittal; one told us merely that it wants to see "all of our customers around the world drive down the cost of solar electricity." The SEIA agrees that the US can compete given an even playing field -- though a SEIA report earlier this summer calculated the US as a $2B net exporter of solar products.

And note that this complaint is focused on c-Si only, and does not involve thin-film -- where US firm First Solar continues to set the benchmark for the supreme solar PV metric of cost/W manufacturing ($0.75/W). "What we believe in is free and open market access here and everywhere else in the world," FSLR's top exec Rob Gillette was quoted as saying at SPI. Not exactly taking up arms for the cause of US brethren.

The real issue is whether such action is in fact divisive and destructive to solar energy overall. A trio of solar executives speaking at last week's SPI event appeared skeptical that the move would do anything but disrupt and perhaps derail the US' anticipated strong solar growth over the next few years. Plunging module prices has been a key driver in lowering costs for installations, which spurs end-demand and creates jobs. Artificially raising prices by implementing tariffs could easily unravel end-market progress. "If module prices go up, installations are likely to suffer," notes Lux Research Aditya Ranade. And imposing tariffs on Chinese solar products may not even solve the problem, as Chinese firms may just seek lower-cost production elsewhere e.g. other Asian nations or Europe, agrees Paula Mints from Navigant Consulting. "Even if there were sanctions against manufacturers in China in the US, there is not enough manufacturing capacity (technology) to take up the slack in demand," she says.

The New York Times draws several parallels to three decades ago when the enemy was Japanese auto imports; ultimately those foreign companies created assembly lines and jobs here in the US, yet domestic automakers still struggle to compete against Japan. Creating division within the industry might achieve short-term sectorial success for some, but distracts everyone from the real prize: getting all of solar on a level playing field vs. other energy sources, both conventional and other renewables. -- J.M.